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The Philippine Financial System

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Benjie Andres

on 29 July 2013

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Transcript of The Philippine Financial System

The Philippine Financial System
What are Financial Systems?
The 'financial system' is a term used in finance to describe the system that allows money to go between savers and borrowers.
Elements of a
Financial System

Financial institutions
Key services provided by Financial System
Risk Sharing
What are Financial Markets?
How does the economy benefit from financial markets?
Money vs Capital Markets
Nature and Importance of Financial Systems
spend more than they earn

spend less than they earn
Allocate or match the supply of savings in the economy
to the users of those savings in a safe and efficient manner
These are organizations that offer financial services.

Financial Market
The system that allows people to buy and sell goods and services to each other.

Financial Instruments
These are assets belonging to a person or company. This can include cash, bonds, or other assets; such as property or items of value.

Financial services
These are offered by financial institutions. These include such things as banking, insurance policies, loans and mortgages, as well as pensions.

Financial Practice
A sort of guideline around how the financial institutions should operate their services.

Financial transactions
These are the actual exchange of assets for goods or services - paying for a new car, or a loan, for instance.

These six elements work together to create a healthy financial system, which in turn builds a strong economy. No one element is more important than the others - they simply represent different mechanisms within the system that allow it to function.
Components of Philippine Financial System
The Philippine financial system consists of:
financial Intermediaries.
What are the roles financial institutions?
1. Term transformation

2. Economies of scale and diversification
in the use of funds

3. Technical Expertise
The major types of financial institutions in the Philippines are the commercial banks, rural banks, thrift banks, specialized government financial institutions, offshore banks, insurance companies and non-bank financial institutions.
The first four types of financial institutions take deposits from public. Because of this, the Bangko Sentral ng Pilipinas supervises them. The last three types are intermediaries with non-deposit sources of funds.
Barriers to matching
Savers and Borrowers
Asymmetric information
and information cost
Adverse Selection
Moral Hazard
How to reduce adverse selection?
1. Screening
2. Monitoring
Increased production
Increased walfare
Philippine Financial Market
Money Market
Money market instruments:
1. Negotiable Certificates of Deposit.
2. Short-Term and Long-Term Commercial Papers.
3. Banker's Acceptances.
4. Treasury Bills, Notes and Bonds.
5. Repos and Reverse Repo

Participants in the
Philippine Money Market

Commercial Banks
Corporates and
Institutional Investors
Foreign Investors
Capital Market
Primary Market
Primary vs Secondary Markets
Thank you very much for listening, that concludes
our report about the Philippine Financial System.

Secondary Market
Bonds Market
Types of Instruments:
Government Bonds and
Corporate Bonds

Issuers and Investor in the
Local Bond Market
National Government
Commercial Banks
Main Investors:
Insurance companies
Corporation and Institutional
Full transcript